The challenge

Australia’s super-sized super system

The Australian superannuation system has produced the fourth largest pool of funds under management in the world. With $1.6TN in assets under its management, the size of the industry is now about the same as GDP, greater than the capitalisation of the ASX, and on par with the combined deposits of all Australian banks.

This is expected to grow to around $7TN in 2033 (2.5 times GDP in 2033) and reach a peak of about $11TN in 2040. While the size of these funds bodes well for the future of the Australian retirement system, it poses a number of questions that attract the interest of industry participants, policy makers and the wider community.

With such a large pool of funds, the allocation of super assets has the potential to drive economic development and reshape the Australian economy through contributing to the development of a corporate bond market, funding vital infrastructure, supporting innovation, and creating economic growth and employment opportunities by investing in Australian business.

Our response

Getting the most out of our super

We’ve teamed up with Monash University to form the CSIRO-Monash Superannuation Research Cluster to address some of the big challenges in managing Australia’s multi-billion dollar superannuation system.

Examining superannuation and the economy and the transition and post retirement phase (Australians over 60), the cluster was formed to:

build confidence in Australia’s superannuation systems and

provide new risk-informed investment opportunities for individuals, the community and the economy.

The cluster combines our expertise in financial maths, social science and risk analysis with expertise from Monash in areas like accounting, economic modelling, finance, health economics and marketing.

Key supporters of the $9 million research project include BT, Cbus, Mercer, Vanguard, Challenger and ANZ Wealth.

The results

An evidence-based approach

The cluster is providing stakeholders with evidence, tools and the opportunity to work together to address the big challenges of managing superannuation.

Its objective is to create a win/win situation where the funds (and their members) have higher returns and key sectors of the economy gain more investment.